Shares of ON Semiconductor and Synaptics jumped after the two chipmakers announced a revised merger agreement, signaling renewed investor confidence that the deal will close.

The stock rally followed word that the companies had reworked the terms of their planned combination. Markets responded immediately, with both stocks climbing on the news — a sharp reversal for a transaction that had faced uncertainty over its original structure.

The revised agreement marks the most significant public development in the merger since it was first proposed. Investors had been weighing whether the deal would survive in its initial form; the renegotiated terms removed that overhang, and the share prices of both companies reflected the shift.

For ON Semiconductor, the deal represents a continued push to broaden its product portfolio beyond its core power and sensing businesses. Synaptics, known for its touch, display and edge-AI interface technologies, brings complementary product lines that could strengthen ON's position across automotive, industrial and consumer end markets.

The positive market reaction suggests shareholders now see a clearer path to completion. Merger-arbitrage spreads typically narrow when deal certainty improves, and the simultaneous rise in both companies' shares indicates the market views the revised structure as more durable than the original arrangement.

The companies have not yet disclosed full closing timelines under the revised terms, and the transaction remains subject to the customary regulatory and shareholder approvals that accompany semiconductor-industry consolidations of this scale.

If the deal closes as restructured, it would combine two established US-listed semiconductor suppliers at a moment when scale and portfolio breadth increasingly determine competitive positioning across analog, mixed-signal and embedded processing markets.